Hello, and Welcome to Fiskars Group's Q3 2026 results webcast. My name is Essi Lipponen, and I am the Director of Investor Relations. As usual, I am here with our President and CEO, Jyri Luomakoski.
Good morning.
Our CFO, Niko Haavisto.
Morning.
Today, for the first time, we also have the business area CEOs on the line. Please welcome Dr. Steffen Hahn from Business Area Fiskars and Daniel Lalonde from Business Area Vita.
Hello, everyone.
Let's take a look at the agenda. Jyri will first start and describe Q3 in brief. After that, he will hand over to Daniel to cover Business Area Vita's highlights for the quarter. After that, Daniel will hand over to Steffen, who will cover BA Fiskars. After that, we will hear from Niko, who will present selected key financials, and then Jyri will end with the guidance for this year. After the presentation, we will have plenty of time for your questions, and we will take questions both through the phone lines and through the chat. Daniel and Steffen will also be available for the Q&A. But Jyri, please go ahead.
Thank you, Essi. Good morning. Just reported this morning our third quarter numbers and all three key elements, top line, EBIT, and cash flow moved to the right direction. What we are extremely pleased is, of course, that for the fifth consecutive quarter, we are reporting growth, comparable net sales up 3%, and this quarter we can observe growth from both business areas. The comparable EBIT increasing to EUR 20.2 million from the shy of EUR 14 million last year. And there we can see that the top line growth is helpful and gross margin expansion. What are the sources for the gross margin expansion at Vita? It's from the positive mix development that's driving it, and the BA Fiskars gross margin got benefits from some U.S. tariff refunds.
In our quarterly reporting last year, we did not address or quantify the tariffs that gradually came on layer by layer to the picture in terms of our cost position, nor are we now quantifying the refund amounts. So I'm sure there might be questions, but preempting that topic, that's not to be disclosed here. Free cash flow last year, negative EUR 20 million, now a bit more than EUR 40 million positive. So turning that is confirming that those things we have been doing in terms of curtailing production and focusing on the net working capital items are bearing fruit. Even though the number 14 might sound small, but the turn is significant. We are maybe a bit boring in terms of our guidance because it's repeating what we already said in February, but probably boring is good in this context.
3.6% top line growth with the reported currencies, but like-for-like currencies three, as mentioned. Here we have comparable EBITDA up to EUR 38.6 million and EPS from EUR 0.08 last year to EUR 0.14 this year. What I believe has been a bit in the markets kind of begs the question, is there a stronger H2 that the guidance was also implying? I think we've started the H2 in a nice way. We have an FX comparability topic of EUR 100K on the EBIT line. Both operative business areas actually improved their EBIT and the big chunk as seasonally was also expected is coming from business area Vita to EUR 20.2 million. This is also a good time to remind us of some things why we also are successful in the marketplace.
We don't have too many data points yet from peer companies, but I dare to claim that in that relative competition situation, we are weathering the unstable environment pretty well. Many drivers and the colleagues from the business areas will address that on sustainability. I believe we are doing the right things. We are having progress in terms of our target circular material, circular products are growing from last year. Emissions both scope one, two, and then the scope three ones. We've been successful in terms of managing our vendor suppliers that they are also bound and taking science-based targets to improve their sustainability. On the social side, good progress on the long-term accident or lost time accident frequency held half down to 2.2 from 3.7 last year. But only around zero is something that will make us happy and keep our people safe.
On the inclusion experience, where the comparability to historical numbers as we changed a bit, the surveys is not really given, that we can clearly improve our act. That takes us to the business area performance part. Welcome for the first time on this forum, Daniel, on how Vita's been doing in the third quarter. The floor is yours, please.
Yeah, thank you. Thank you, Jyri, for that. I am happy to be here. Good morning and good afternoon to all. Listen, overall, as you can see on the slide, I would say a solid quarter for Vita. If I just stick to the points on the right-hand side, we have registered the fifth consecutive quarter of comparable growth in net sales of 4.5%. So we are comping, obviously, previous quarters and last year's quarter, which was positive as well, which is really nice to see. The growth came across both of our big channels, the D2C channels, which includes four sub-channels, as well as wholesale, which as you know, is a very important part of our business. From a brand point of view, we had some really good performance across many brands.
We have cited three today, with particular focus on Georg Jensen, which continues to have a very strong growth as we have announced in previous quarters. Moomin Arabia and Rörstrand, which is celebrating this year its 300th anniversary. So that was very, very positive. On the comp EBIT, it more than doubled versus last year. As Jyri explained, there were a few positive factors which I will describe on the next slide, notably higher volumes and improved gross margin, and then some savings from our turnaround actions and plans that we exposed, I think, to the markets earlier this year. Gross margin, as I just explained, went up by 190 bps to 53.9%. While focusing on not only top line but EBIT and cash flow, we are having meaningful efforts throughout the company at the same time to reduce our elevated inventory levels and rationalize production as it continues on.
So this is always the backdrop and a very important initiative for Vita brands. If I flip to the next slide, just to explain some parts of the bridge that takes us from a EUR 5.1 EBIT to EUR 11. Let us start with sales volume. I think that is relatively self-explanatory by the 4.5% like-for-like growth. On the gross margin, as Jyri mentioned, we have a positive mix happening this quarter. What that means is the brands in our portfolio with the higher gross margins are those that have grown faster than the average. That is what that means. Then maybe I will explain the SG&A part of the bridge. So two things here I want to mention. The first is the transformation plan that we announced to all of you early on this year in February.
Just for a reminder, we projected a run rate savings of EUR 28 million by the end of next year. So the only comment I would like to make on that is that we are completely on target to achieve those results and to achieve the targets that we put for ourselves in 2026. So that plan is on track. We expect a third, as we said, a third of the savings to occur in 2026. That was offset, though, by a few things. Notably bonus accruals. So there are full bonus accruals at this time, which was different than last year. Also a part of our business on the concessions business, which is the business in department stores. We run concessions, and we had a pretty meaningful increase in sales in the concessions, and those are variable costs. So this increased that part of the SG&A.
Then maybe the last slide, just a few highlights. There are many, many highlights. We had to pick four. There were probably 50. This is what makes our business grow. Some notable ones, Georg Jensen launched a new collection called Fold, and that was developed with our internal designers, and it is intended to become an icon collection in the home business one day. We had a very successful launch. You can see a picture of it here. Iittala also introduced a collection, a collaboration called Unda with perhaps one of the most recognizable global designers today, Sabine Marcelis. This was launched in Q3. Beautiful products. Moomin Arabia featured in its program, Rebel Club Features, which was very, very well received in the markets. There were a lot of festivals in Helsinki and other areas. So that was a highlight of the quarter.
The last is Waterford celebrated the 250th anniversary of the U.S. with a special exclusive collection as well. These are just four of many highlights, which all contribute clearly to our like-for-like growth and the desirability of our brands. That is all I have to mention now. I will pass the baton to Steffen.
Thank you, Daniel. Good morning, everyone. I will definitely contribute to your quota for Daniel with the Rebel Club collection for my daughters. Looking now at the Business Area Fiskars results on the next slide. What you see on the left is that we had a solid, considering the circumstances, I would say good quarter with slight growth 1%, and excluding currency, 2%. Both regions contributed. North America continuing the momentum, and Europe, Australia, and New Zealand stabilizing. On the middle of the slide, you see our EBIT, which is ultimately paying the bills and has been on a good trajectory for us over the third quarters in past years, if you disregard the COVID heydays in 2022. This quarter is no exception. Driven by volume and gross margin and helped by some tariff refunds.
If we look closer at EBIT on the next slide, you see how we are bridging, and it is pretty much all good news. Volume and gross margin helped. Margin and other costs were a nuance lower this quarter. SG&A, the orange block, which we usually view critically, was pretty much all good cholesterol as we could call it. Lastly, when our performance was below our targets, short-term incentive accruals were relatively low, and with a better performance this year, we need to accrue for those incentives accordingly. So it is primarily a comparison effect, not an increase in the underlying base. Another sizable portion of this orange block was R&D, which is consistent with our strategy to drive more innovation. Our direction on SG&A, reducing cost to reinvest into growth remains intact even if we have this increase in quarter three.
If we go to the next slide and we look at some of our launch highlights. We were covering power tools and a wonderful collaboration on our important scissors business. Let me talk a bit about the power launches that we're expanding now. I think we have built something that is very unique in our industry. A unique battery platform architecture for two reasons. One is our power tools are based on a power bank, and that gives you basically endless applications 365 days a year, not just when you use your power tools. The other thing is that it's scalable across voltages based on one and the same battery. If you take the customer or retail customer's perspective, that is exactly what they want in terms of SKU productivity. One battery for truly all applications.
When you look at the consumer, that is what they're looking for in terms of value for money. Both for the customer and consumers, I think we have a value proposition that is very compelling. Consequently, we're expanding this platform. We're now launching an eSnowShovel this fall. We have a manual snow shovel business, so it's very complementary to what we already have in retailers. In spring, we are launching electric hedge shears. We have manual ones and so again, very complementary to our footprint that we already have the powered version. On the other side, you see on the scissors, we've launched this wonderful collaboration with MoMA, the Museum of Modern Art. We've got wonderful reactions from consumers and social media on this collaboration.
We are encouraged to do more of these things in the future, building on the resonance we received on this launch. With this, Niko, over to you.
Okay. Thank you, Steffen. I have a few selected key financials. Our free cash flow, it improved year-on-year, driven by the trade working capital development, positive in that sense. Operative cash flow was EUR 37 million. On the CapEx side, we are continuing our discipline there. It was EUR 10 million in this quarter, same as in the comparable quarter last year. On the cash earnings, I will go into the following slide. First of all, our comparable EPS went from EUR 0.08 - EUR 0.14, mainly driven by the EBIT there. What is really important, of course, is the cash EPS as well. There we went from basically zero level to EUR 0.44 per share. So good development there. The main driver there, the change in the net working capital.
Net debt to EBITDA, we are improving from the comparison period, coming down on the absolute terms in the net debt of a little bit over EUR 50 million, and we are at the level of 3.36 times. There we are aiming towards that 2.5 times level in the coming years. With that, I hand it over to Jyri for the guidance.
Thank you, Niko. Guidance, as I indicated in the opening, we might be boring. We are repeating exactly what we said in February when we issued first time the guidance for 2026. What is behind in the thinking of our guidance, that is, the assumptions, we do still see that uncertainties in the global economy, they continue. Visibility is limited. We know that the fourth quarter is important for our comparable EBIT generation, and that is the main season for business area Vita. We are expecting that the changes, and Daniel already referred to those from our reorg activities announced in February, that they continue to support the EBIT in the fourth quarter. We do recognize that in the absence of snow, which is of course our dream for the Nordic markets, for snow tool business to be a lot of snow coming.
For BA Fiskars, this is not otherwise the high season, but some further tariff refunds will fall into the fourth quarter. Last year, already in the summer, when both Daniel and myself, we were new in our roles, we clearly recognized that we need to curtail our production to manage our inventory situation, which was kind of too big. Since then, we have been curtailing in some of our key factories the production which leads to negative variances. Those activities and actions actually are continuing. Of course, when you compare now year-on-year, we get into, in a way, lighter comps on that aspect because those activities started mid last year approximately. That was the guidance, and that takes us to the Q&A. Essi?
Yes. Thank you to all presenters, and now we have time for your questions. I can see that there are already some questions in the chat, but maybe we check if there are any questions through the phone lines.
If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad. The next question comes from Maria Wikström from SEB. Please go ahead.
Hello, this is Maria Wikström from SEB. I have a few questions. Starting with the U.S. tariff refunds, if you could comment on the magnitude during the Q3 and the expected magnitude during the Q4, please.
As said, we are not commenting those on a quarterly basis. That is the answer there.
But the magnitude is still significant given that it is raised as a separate sub-subject, I believe.
Acoustically, I missed a word and a half from your question, but as Niko said, and as I said in the intro, we are not commenting on the quantum or the magnitude in our quarterly reporting. We did not do that last year when those tariffs, multiple of them actually, hit us and now one of them is subject to refunds based on a Supreme Court decision. We are not disclosing those numbers. Have not and will not.
Okay. I go to my second question, which is if you could elaborate a bit about the sales trend in North America, given I think it has been one of the where previously it has been for you the best performance, and now we see the North American comparable sales growth declining. If you could give a little bit color that if this is a sustainable trend that the U.S. consumer is hit by the ongoing inflation, or how would you interpret the trend in the U.S.?
If I start, first of all, it's a function of three things. We have commented in our report that our Fiskars branded revenues continued to develop favorably, and Steffen will address that, too. On top of that, we have the outdoor business, which is not Fiskars branded. That's our Gerber brand. Then we have Vita businesses in the U.S. Some of these have been also subject to, in a way, internally generated changes or if I use the word disruption, it's too strong, but we've been moving DCs and doing stuff like that. But the big beef and the consumer sentiment and the policy, if I hand over to Steffen who under the Fiskars brand has the biggest bulk of our consolidated U.S. business. Steffen, please.
Yeah. Thank you for the question. I hear an echo. We have a continued trend that is positive. So far there hasn't been any change in that. But of course, we are very closely monitoring the tonality that's getting sharp ahead of the midterms on fuel cost and affordability in the U.S. But so far so good, I would say.
Thank you, Steffen.
Then maybe finally, just getting a little bit of indication that given that you have a quite big chunk of a third-party retailing. How would you say is the pulse for the upcoming holiday season then? Are your clients currently willing to take more inventories to preparing for better high season compared to last year? Or what is your sense, where is the market moving from here, please?
I guess your question is more referring now here to the seasonally more relevant business, i.e., Vita, where the share of D2C is bigger in Q4 than it is on the average of the year. Daniel has his pulse with our distributors, our retailers. Daniel, please.
Sure. Jyri, maybe I would answer this way. Our focus is entirely on sell-through. Sell-through of our D2C, which is ours, obviously, and the sell-through with our key partners throughout the world, in all markets. The sell-through has been good thus far. That is great, and I think some markets are feeling positive by the end of the year with the context that Jyri stated earlier. From an inventory point of view, we are very mindful to match sell-through and inventory as well. We do not want to build inventories unnecessarily at our key retailers. We want to match both. Our focus has been on the sell-through, which has been, I would say, relatively positive throughout our key retailers and wholesale partners throughout the world.
And maybe if I chip in one more question as Daniel Lalonde is on the line, asking about what is currently the status for your turnaround brands, and how is the turnaround currently progressing for Wedgwood, for example?
Okay. Yeah, so not the turnaround plan. You're now referring to the ones where we showed that we will get to EUR 28 million of run rate savings. But, as you know, we have some brands that we're scaling today. The example is Georg Jensen. We're scaling both sides of the business, very strong in both jewelry and home. Some of the turnaround brands, which were mainly in the, what we call the house of British and Irish design. You talked about Wedgwood, there's Waterford as well. Everything is moving, I would say, to plan so far. So, it's moving certainly in the right directions. As we indicated before, want to make sure that we turn these brands around before scaling them. So I'm very mindful about that. And Wedgwood, you asked in particular, has had some, I'd say, relatively positive Q3, although we're not revealing any numbers.
But we're very much on track with Wedgwood. And Waterford also has an industrial footprint that we talked about before, but we're well off with a very tight program to improve both the top line and the EBIT performance and inventory performance of these brands as well. So overall, we're making good progress on our turnaround brands, I would say.
Thank you very much. I have no further questions at this point.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time. I hand the conference back to the speakers.
Thank you. There are questions in the chat, so we will continue with those. Let me see. Maybe we can start with a question related to Vita's turnaround actions, and there is a question on how much of the one-third of EUR 28 million savings realized in Q3. Daniel, if you can take this.
Sure. Well, listen, I do not think we are going to specify the exact number per quarter. I just go back to the point I made earlier, which is the EUR 28 million, which we have exposed to everyone. We are running very much on track, slightly ahead, I might even say, to the capturing a third of those savings this year. We measure it every month across all my markets, across all my brands, across the global functions as well, and we are piloting slightly above that target of one-third. I think that is all I could share with you at this point in time.
Yes. Thank you, Daniel. There was also a question, how much do you expect for Q4? I can already answer that we will not quantify that either. Let us see what we have next. We have a question related to costs related to that program. Daniel, this is also for you. Vita turnaround costs have already reached EUR 11.9 million above the original estimate of approximately EUR 9 million, and further cost expected in Q4. Have the expected total costs increased?
Yes. It's a good question. I think they have. As our program has progressed and a lot of individual actions have been finalized, I think we can say fairly that the one-off costs have become clear and have turned out to be higher than estimated. I think that's a valid point. Again, I think we're not going to reveal exactly all the figures by quarter. I would just end up saying again that the program itself remains very much on track. Again, slightly above what we were expecting this year, and the savings have all materializing from Q1, the last month of Q1 as planned so far.
Yes, and continuing with the same topic. Did the savings program in Vita support also gross margin in Q3? How does the total EUR 28 million split between SG&A and COGS? Daniel, if you can give some kind of an answer to this.
Okay. There are a lot of questions on this program, which is fine. I can just give you what I can give you. The answer is yes. Some of the savings, without getting into much detail, they're both SG&A and gross margin related. I can just say that the savings that we said we would obtain this year are very much on track, ahead of track, and they affect both. Some of the gross margin improvement was as a result of the transformational plan that we presented early on this year. They're in both. You'll find them in our P&Ls in both the SG&A and in the gross margin as well as planned.
Yes. Still continuing a bit more with Vita, and then we do have some questions for Steffen, too. About the Vita inventories, there are a couple of questions related to those. Vita's Q3 gross margin improved despite continued production curtailments. Could you quantify the remaining negative impact for Q4 and for 2027? When should we expect Vita's inventories to begin declining more visibly? What would you consider a normalized level? Sorry, there are a lot of questions in the same question, but I guess we can say that we don't quantify the impact, but maybe we can answer about the schedule. When do we expect them to begin declining more visibly?
Okay. Again, fair question. Let me tackle the inventory one, because I think that's important. As I mentioned earlier, our key financial metrics obviously continue the top-line growth. Go for another quarter of like-for-like growth after five, which is good. Improvement on EBIT gross margin, as we talked, cash flow is important to us in inventory. Inventory is a big focus of ours. Reducing inventory is there's multiple levers that we're going through to reduce the inventories, not only the quantum. We measure it in the number of days of inventory outstanding, but also what's important to us is the health of the inventory as well. So the quality of inventory, not just the quantum and the number of days. It's a clear priority for us. It takes a little time, as I think we've discussed earlier. Our products are not perishable, as you know.
Our aim is to bring our inventory levels down gradually in a controlled manner without harming the business. This is our goal. We've made some progress. We have made some progress since we last chatted. Also what we've decided to do this year, in addition to reducing the quantum, that's our objective, the days, the quality of the inventory. We've also decided to fund a slight program to increase the availability of our top SKUs in the key brands. So that was a very conscious effort that we made to make sure that we're at very high availability rates of those products as well. So that's a little bit part of the overall inventory strategy, I would say. But overall production remains curtailed, and it's a big focus of me and all our teams to get the right quantum and the right quality of inventory.
Yes. There are some similar kinds of questions, so I will just check if we have already discussed. This also relates to Vita inventories. Can you please provide more color on the gross margin implication and price actions to reduce inventory?
Okay. Essi, can you repeat that again, please? Did you say price as well?
Yeah. What sort of price actions are we taking?
Implicitly, whether we have been selling at deep discount to reduce the inventory. I think that's in plain language, the question.
Yeah.
Yeah. Okay. The answer is no. One of our objectives as well within our company is to try to sell more at full retail overall. Reducing discount rates, particularly in the D2C channels. That's important. We've had also a program to When I said about the quality of inventory, we have the current inventory, and then we have products that become obsolete as well over time, delisted from the catalogs. There's a specific team and program on the obsolete inventory as well to sell those inventories throughout the world as well. I think on the overall inventory, and then we've had a price increase, but I don't think that's your question. Some of our brands have had a price increase also in Q3. No, we're being very mindful overall on how we get to the reduction and the better health of inventory.
It will take a little time, making sure that it has not a big impact on the brands. We have to manage both sides while also delivering more top-line growth in EBIT. We're mindful, and it's not a How can I say this? It's more of a mid-term. There's a lot of actions happening now, some progress obviously now, next year, but it's not something that was solved in a quarter or two. It will take a little bit of time, but it's moving in the right direction.
Before Essi shoots off the next question, because they are in a way on the same topic on the inventory, which I believe pretty much have been answered, what we can answer. What I, in my intro, also mentioned that as we started to curtail the production last year, mid of the year approximately, so initially of course, in relative terms comparing to the prior year, the impact and the burden was bigger. Now we are having, as comps, times when we have been already curtailing the production. In terms of the sellout, when the production is curtailed, Q4 is the highest volume quarter. That is of course the time when we also expect to see reductions taking place. But it is a marathon, as Daniel said, but it is a marathon with kind of good shoes. Our goods are not getting sour or rotten or anything like that.
Like in some faster moving industries it would be the case. But that is the case, that comps are getting, in relative terms, easier on this production variance or as the follow-up or consequence of us curtailing the production.
Good. Maybe that concludes the inventory topic. Then a question for Steffen on BA Fiskars. We mentioned in the report that Europe stabilized, and we mentioned the new categories. There is a question on how did the legacy categories perform in Europe?
Yeah. Thank you very much. First of all, thanks for the question. Yeah, I feel utilized. But joke aside, I think I alluded to this when I talked about our power launch. What we are seeing is that the world is motorizing, and of course that has an effect to some of our manual tools. It is not dramatic, but it is over time, a slight erosion, and we are countering this. There is subsegments that we have, for example, crafting sees a bit of a renaissance in the U.S. in particular. There are subsegments that are growing and with our focus on innovation, we take the deliberate path to move our product footprint to growing subcategories. The launches we are doing in the future are on that intention. We are observing the markets.
We have retail data, of course, that shows us more near-term tactical shifts in categories. Then we have the long-term trends, and we are baking our portfolio for the future, and exactly to make sure that more of our portfolio is exposed to intrinsic category growth. I think we are satisfied with our base business performance, but we know that we have to do work to move our business overall into faster growth categories to deliver against the targets that we have 3%-5% per year in top line growth.
Good. Then there was a question about the tariff refunds and how much, but that we have already answered that we are not going to disclose that. I am not sure if this question is for the group level, so maybe we can start from the group level, and this is then for you, Niko. Gross margin improved clearly. Do you think this is a sustainable level or was this clearly supported by, for example, the tariff refunds?
Once again, on the tariffs, we feel that is the level that we are going forward as well.
Let me see. I think there are no more questions at this point, so that then concludes our webcast for today. Thank you for your active participation, and have a nice rest of the week.
Thank you for joining.
Thank you.
Have a good day.
Thank you.
Thank you, everyone.
Okay. Bye.